Yes, people still play, but they no longer create.
With the exception of Adversarial attacks on particular algorithms, no human is creating new Chess theory, discovering new openings, for example.
As a game, challenge, competition, social activity, chess is alive and well.
As a creative endeavour, or vehicle for discovery, Chess is solved. It is no longer an art of its own.
We're part way through this transition now with Go as well. New opening theory, new joseki, new strategies are being played by robots, and at the highest professional levels we are playing catch-up to understand.
I once heard someone say people will never be able to understand God’s plan, just as a dog will never be able to really understand why their owners do things the way they do them. I feel like this is a similar threshold; a humans mind is incredible, but not perfectly suited for thinking in advance, or calculating probabilities.
So I guess my point is, while this certainly feels a little scary, I think it’s just a consequence of the game, and probably okay.
That's not true though? Human chessplayers are constantly exploring new lines, and engines are a useful tool but by no means the bottom line - indeed lines that were neglected because engines gave them low evaluations have been a fruitful source of ideas lately, because humans play differently from engines and may not be able to find the refutation.
For art it feels a bit different since it’s not competitive and more a practicality thing. Perhaps art will shift from placing individual strokes on an image and move to making creative directions for AI to resolve in to an image or enable more people to create labor intensive works like animation.
It was not so long ago computers bet humans at chess, yet people still play.